Sam Zell to buy LA Times

Sam Zell sold his company for $36bn last year

The Los Angeles Times newspaper has agreed to be bought by real estate magnate Sam Zell. Read original article

Mr Zell, who sold his own property firm last year, won the $8.2bn (£4.14bn) bidding war for Tribune Corporation and will become its largest shareholder.

He beat off fierce competition from businessmen Eli Broad and Ron Burkle, who also bid for the firm's assets.

The US newspaper industry has been suffering from falling sales and advertising revenues in recent years.

Ownership kudos

Tribune launched a strategic review of its business last year, a move which analysts said would eventually result in the sale of the entire company or its break-up.

TRIBUNE NEWSPAPERS Los Angeles Times Chicago Tribune Newsday Baltimore Sun Orlando Sentinel Hartford Courant

The group's other major publications include the Baltimore Sun, while the company also owns a portfolio of 25 TV stations and the Chicago Cubs baseball team, the last of which will be sold off separately.

The interest shown in Tribune has been surprising given the sector's recent struggles, although newspaper ownership still carries with it significant prestige and social kudos.

Following the deal - which requires shareholder and regulatory approval - Mr Zell will control about 40% of the firm's shares.

Employees will own a significant minority stake in the business.

Tribune said the deal would enable it to invest in its long-term future with more certainty.

"As a private company, Tribune will have greater flexibility to transform our publishing, interactive and broadcasting businesses with an eye toward long-term growth," said Dennis FitzSimons, the firm's chief executive.

Consolidation

Newspaper publishers have struggled to react as classified advertising, the bedrock of their business, has gradually migrated to the internet.

These problems have led to a wave of consolidation.

Knight Ridder, publisher of the Miami Herald and Philadelphia Inquirer, was bought for $4.5bn last year by rival McClatchy.

Sam Zell founded real estate firm Equity Office Properties Trust which was bought last year by private equity firm Blackstone for $36bn.